Question

Which of the following statements defines risk management?

a. it is the process of conserving earning power and assets by minimizing the shock from losses.
b. it is the process of measuring employee performance in organizations.
c. it is the process of managing an organization's workforce.
d. it is the process of increasing productivity by strategically managing the workflow.

Answer 1

Risk management is the process of conserving earning power and assets by minimizing the shock from losses.

Step-by-step explanation:

Risk Management

Risk management is the process of conserving earning power and assets by minimizing the shock from losses. It involves identifying, analyzing, and evaluating potential risks to an organization and implementing strategies to mitigate or reduce those risks.

For example, a company might identify the risk of a natural disaster damaging its production facilities. By implementing risk management practices like purchasing insurance, creating emergency plans, and diversifying production locations, the company can minimize the financial and operational impact of such an event.

This process is crucial for businesses to protect their financial stability and maintain the continuity of their operations.